Target set to reduce average tariff from 20.19% to 9.70%
The government has decided to significantly reduce import duties under the second phase of tariff reforms.
A five-year National Tariff Policy (2025-30) has been prepared to promote economic activity and enhance competitiveness in the trade system. The policy proposes a phased reduction in customs duties, regulatory duties, and additional duties, with a target of lowering the average tariff from 20.19% to 9.70%. While the move is expected to result in a revenue loss of Rs143 billion, parliamentary circles believe it will increase market competition and reduce import costs.
According to officials, the policy proposes capping customs duty at a maximum of 15% over the next five years. It also includes a plan to gradually reduce the additional customs duty from 6% to zero. The maximum rate of regulatory duty is proposed to be limited to 20% and phased out over time.
According to the Ministry of Commerce, the target is to bring the average import duty rate down to 16.56% within five years. The Engineering Development Board has also recommended equal tariffs on locally manufactured and imported vehicles. Under the new policy, equal opportunities are proposed for both local industry and the import market.
The proposed tariff reforms are part of the government’s broader vision to boost Pakistan’s business environment, grab investment, and integrate the economy more practically into global supply chains. Officials believe that lower tariffs will help industries access cheaper raw materials and machinery, enhance productivity, and ultimately boost exports and economic growth.
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